CELLE. If you want to build a house or buy an apartment, you inevitably have to deal with financing. If the buyer takes out a loan, it must be secured by mortgages. A common mortgage is the mortgage. What is it all about and why do future owners need a land charge?
Land charge: security with or without a letter
A land charge secures a loan taken out by a borrower and is appointed with the help of a notary. This accompanies the debtor in handling a property purchase agreement through the land registry. For example, he asks and documents how the future owner imagines the land register order and advises on this.
The land charge exists in two forms. One variant is the land charge, which is only entered in the land register. If a “land charge without a letter” is mentioned in the land register, it is a book land charge. There is also the letter mortgage, which is evidenced in a security beyond the land register; it functions as a certificate and security at the same time. If the land register speaks of a “land charge” without an addition, a letter land charge is meant.
There are costs for both, both for the order and for the registration. In order for the letter to be issued in the case of a letter mortgage, the land registry charges an additional fee.
Simply transfer the letter mortgage
Even if a letter mortgage initially costs more, it can pay off in the further course. Because with it the buyer is very flexible. For example, if he wants to take out a new loan and thus transfer the land charge to another creditor, such as another bank, he can hand over the land charge to him free of charge. The letter mortgage can be assigned in private writing or in a notarized form.
In contrast, a land charge can only be transferred by agreement and entry in the land register. Everything else that is to be changed must also be entered in the land register individually and for a fee in the case of a land charge without a letter.
Loans repaid? Buyer must receive letter
Until the loan for a property has been paid off in full, the mortgage certificate usually remains with the bank. Then she usually sends the letter directly to the borrower. Now the property buyer can have the bank issue a cancellation permit. With this he in turn, with the help of a notary, applies for the deletion of the land charge at the land registry. The deletion leaves a “clean” entry in the land register: It makes sense, for example, if the owner wants to sell the property.
Always keep the land charge in a safe place
In order to delete the letter mortgage, it is imperative to present the original letter. Finally, it could be that a third party has acquired the land charge and is possibly making claims against the property owner. Therefore, the following applies: As soon as the loan has been repaid, the owner of a loan secured with a letter mortgage must ensure that he receives the original of the mortgage certificate and the cancellation approval from the bank. The letter must be kept extremely carefully.
Anyone who would like to seek advice on this topic from a notary in advance can find the right contact person on the Internet at notar.de. You can also visit the online consumer portal of the Berlin Chamber of Notaries at ratgeber-notar.de.
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